Call for IR Reform

Former Resources Minister and former Australian Council of Trade Unions President, Martin Ferguson, is pushing for a new round of Industrial Relations (IR) reform.

This is backed by the mining industry.

The demand is for the right of workers to opt out of collective agreements and move to individual agreements. Further, the call is for restrictions on legal strikes, and a higher bar to prove unlawful employer actions.

Re-instate individual agreements

The argument is, for example, that the mining industry has used individual agreements extensively for many years to facilitate flexible work practices.

The Minerals Council, which includes BHP, Rio Tinto and Glencore, has worked with Ferguson for the past nine months to develop the IR reform package, which also proposes limits on agreement content, restrictions on union right of entry, and extension of greenfield agreements.

The disliked Howard Government Fair Work Act removed individual statutory agreements. Ferguson says the Fair Work Act has extended collective bargaining well beyond wages and conditions into areas of everyday management and into the ability to respond to changing market conditions.

Labor outlawed opt out clauses in enterprise agreements in 2012 after a Fair Work Commission full bench ruled that such clauses undermined bargaining certainty. We understand, Labor does not want further IR reform in this area.

Lack of Government Appetite

This push comes as the Turnbull Government is yet to respond to the Productivity Commission’s report on workplace relations delivered more than 18 months ago, with the Minerals Council frequently citing the Commission’s own recommendations to support its proposals.

The Turnbull Government restored the Australian Building and Construction Commission aimed at removing some of the corruption, inefficiency and unnecessary costs in the construction industry. The Coalition does not appear to want a broader IR reform package.

Renewed Focus on Business Leaders

The shift is from a focus on Union power, rorts and corruption to a focus on extravagance, waste and fraud in business.

The lack of leadership, for example, by the Commonwealth Bank of Australia (CBA) to address extensive money laundering highlights the shift in attention.

This inevitably leads to questions about seemingly over-paid CEO and KMPs (Key Management Personnel) in these businesses where leadership is lacking.

While the Union movement represents less than 10 per cent of private sector workers, it remains a powerful player exactly because of concern about lack of wage growth and unemployment.

The Solution

As the mining industry is arguing: improved productivity remains vital to competitiveness and any prospect of attracting new investment in what should be Australia’s area of comparative advantage.

Balance this with improved business leadership: more effective communication with shareholders and the public; more accountability, and an improved re-balancing of executive pay and conditions.

IR reform should continue

Ferguson’s suggestions should start the debate but how likely will that produce a result in an environment where both Liberal and Labor do not want to engage in the debate?

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